The Year In Housing News: Eviction Moratoriums, Delayed Mortgage Payments, Foreclosures

The pandemic this year has put housing — what it means to us, who can afford it, and who can’t — front and center.

Eviction, mortgage and foreclosure delay efforts were put in place to stop people from losing their homes. And just this week, the New York Legislature passed a measure banning most evictions during the pandemic.

During the 2008 housing crash, the U.S. saw a “tsunami of foreclosures and evictions,” says Aaron Glantz, senior investigative reporter with the public radio program Reveal and author of “Homewreckers.” But the CARES Act and executive actions from President Trump prevented millions of Americans from facing eviction in 2020.

Nearly 3 million American homeowners are in mortgage forbearance, meaning they’re legally allowed to fall behind on payments, he says. And 12 million Americans are behind on their rent and could face eviction if moratoriums end.

“We’ve bought ourselves some time as we’ve all hunkered down. We’ve avoided the worst,” he says. “But all of the fixes so far have been temporary.”

Aaron Glantz’s Top Housing Stories Of 2020

The Moms for Housing movement in Oakland, California

“It’s pretty hard to even imagine that there was a time with no pandemic and we were dealing with issues like housing costs, sky-high real estate, gentrification, and also vacant housing in many of our cities that had been bought up during the Great Recession by shell companies. And in fact, there’s been more than 3 million homes and 10 million apartments around the country that are now owned not by people, but by LLC, LLP, shell companies. And one of them was in West Oakland. And there were a number of moms who were homeless. And they saw this really nice house in this West Oakland neighborhood that had been bought up by the shell company, was sitting there empty and they took it over and they moved in. And it sparked national attention to this problem that we have that we are losing control of our communities.”

Concerns loom for renters and small landlords in 2021

“There’s 12 million American families who are behind on their rent right now. They’re behind, on average, about $5,000 dollars. We could see a potential tsunami of evictions. On the other hand, this may be mitigated somehow by the fact that landlords still need somebody to pay rent. And so if the landlord doesn’t think that they can get another tenant to move in, if we’re still in an economic depression … tenants have a little bit of leverage to bargain and gain some additional time from their landlords. 

“The people who I’m really, really worried about right now over the next few months are actually the small landlords. If you’re a big corporate Wall Street landlord, like the ones that I write about in my book, who came through after the housing bust and bought up tens of thousands of homes, this pandemic is nothing to you. Real estate values are still high. You just move your money around and ride it out. 

“But if you are a family that owns your own house and maybe you just own one other property, you own one other house, and that other house is your life savings, you are counting on that tenant to make rent every single month. And with these eviction moratoriums being extended and no relief going to the landlords, we are seeing incredible pressure on these mom and pop landlords. And what’s likely to happen, what I am most worried about, actually, is that all of these mom and pop landlords all over America without relief will sell and they will sell to the big private equity firms that don’t live in the neighborhood, that don’t know their tenants, where, if the water main breaks, you have to go online through a portal or dial an 800 number instead of actually getting someone over to fix it. And I would be very, very worried about small mom and pop landlords. This primarily affects people of color who tend to be more likely to put their assets into real estate, especially immigrants, than the stock market. We could see a real shift in who owns our cities unless action is taken.”

People moving out of cities during the pandemic 

“Interest rates are very, very low right now. And so that means that if you own property like I own my house and I have a monthly mortgage payment, if I needed to reduce my expenses, I could refinance my house into a new loan at a lower rate and extend out my debt. And so that means that a lot of working-class families, where their mortgage payment is by far in a way their biggest monthly expense, are able to lower their expenses. It also means that middle-class families have been able to buy homes. 

“And so one of the most shocking things to me about the pandemic has been watching the homeownership rate go up during the pandemic. I mean, I thought for sure that we would just be hemorrhaging homeowners. But, you know, people are able to get cheap access to capital. They’re able to borrow money and move out of renting and into homeownership in ways that they haven’t been before. And then, of course, as you say, the more well-heeled who can afford to not only own their own home, but perhaps a second home or leave the city and move out to the suburbs are doing so. One of the effects that that’s having for renters is that it’s giving them some leverage. We’re seeing rents in high-cost cities like San Francisco, where I live, go down 25%. So that means that our cities are getting more affordable. So the question is, OK, let’s say the pandemic ends, then what?”

What to expect from the Biden administration on housing

“It’s really hard to tell because [Secretary of Housing and Urban Development nominee] Marcia Fudge is not a person who has a huge track record on housing. But what I can say is, and this is of great concern to me, the homeownership rate in America did not only decline in those early years of the Obama administration during the recession, but actually declined every single year between 2008 and 2016. And that further, throughout that entire period, the Obama-Biden administration repeatedly chose to subsidize corporate Wall Street interests as they acquired houses that used to be owned by families, bundled them into mortgage-backed securities, rented them out at high cost, and, generally speaking, oversaw the biggest transfer of wealth from the middle class to the rich in 100 years. 

“And so the question that we should all be asking ourselves is, should we be concerned now with [Joe] Biden coming in during a similar disaster about a repeat of that? What is his plan to avoid those same pitfalls? And I haven’t heard anything honestly from him one way or the other that gives me confidence that he will or won’t go in a certain direction.”

Cristina Kim produced this story and edited it for broadcast with Eileen Bolinsky. Allison Hagan adapted it for the web.

This article was originally published on WBUR.org. [Copyright 2020 NPR]